(Global Trade Review, London, 15 November 2023) Oil supermajor ExxonMobil has unveiled plans to become a “leading producer” of lithium ahead of an expected leap in demand for battery metals – but for pure commodity traders, big moves remain a more distant prospect. Export credit agencies (ECAs) are also upping involvement in lithium production. In August, ECAs from Australia, South Korea and the US revealed they were considering providing a US$195mn package of support for a lithium mine in the Australian outback, which is expected to produce 15,000 tonnes of lithium carbonate equivalent per year. A new report from Both ENDs and FARN explores the case of lithium mining in Argentina and provides recommendations for making a just transition to sustainable energy systems. It explores the extraction of these minerals which requires investments, and how export credit agencies (ECAs) are increasingly looking for ways to support businesses that do what they call “green projects” abroad, projects which are promoted under a market logic, but with rhetoric linked to the climate crisis and energy transition. This raises the question: should they? And, moreover, is mining for critical minerals a green investment? And are export credit agencies the right agent to help promote a just energy transition?
Argentina
Asociación de Cooperativas Argentinas (ACA) Borrows $80m from FMO, FinDev Canada, Rabobank to Boost Farm Exports
(Microcapital Monitor, Boston, 10 March 2023) Asociación de Cooperativas Argentinas (ACA), a network of 143 agricultural cooperatives in Argentina, recently borrowed USD 80 million from three institutions, led by the Dutch development bank Financierings-Maatschappij voor Ontwikkelingslanden (FMO). FMO is lending ACA half of the total, and the Canadian government’s FinDev Canada and the Dutch cooperative Rabobank are each providing USD 20 million. ACA plans to use the cash as working capital in support of its exports of grains and seeds that it buys from cooperatives that represent 50,000 farmers. FinDev Canada is Canada’s development finance institution (DFI), supporting the private sector in developing markets to promote sustainable development.
Exim backs exports to Argentina’s YPF
(Global Trade review, London, 12 August 2020) The Export-Import Bank of the United States (US Exim) has penned a US$75mn credit guarantee facility (CGF) with state-backed Argentinian energy company YPF. US Exim will cover a loan from Bank of America as part of the deal, with YPF – the biggest oil and gas producer in the South American country. As the oil sector reeled from a price war between major producers Russia and Saudi Arabia in March, together with the impact of Covid-19 containment measures – which saw demand and storage space for the commodity dry up – the US oil benchmark was briefly plunged into negative territory for the first time ever.
Argentina Seeks IMF Help to Shed Poor OECD Export Credit Risk Ranking
Argentina’s sovereign debt may be outperforming most of its emerging-market peers this year, but the OECD says the country is as risky as North Korea, Venezuela and Iran. The ranking is a remnant from the days when Argentina was still a pariah in international markets — and it could soon change. About half a dozen International Monetary Fund economists are set to touch down in Argentina in September to assess the reliability of the country’s economic statistics and the sustainability of its fiscal and monetary policies, as well as the banking industry. The so-called Article IV consultation — normally an annual review but, in Argentina’s case, the first in a decade — is a key step to reclaiming legitimacy among organizations like the OECD and unlocking cheaper financing from member nations.
SACE boosts trade ties with Argentina announcing €700m in guarantees
(TFX News, Rome, 30 May 2016) Italian ECA SACE reopened its support of transactions with Argentina after the Italian undersecretary for development Ivan Scalfarotto last week announced guarantees for €700 million credit lines during his visit to the newly-liberalised Latin American country.
Argentina to renegotiate Paris Club debt without IMF presence
(Dow Jones, Buenos Aries, 15 November 2010) Argentine President Cristina Fernandez announced that the Paris Club group of lender nations has agreed to negotiate some US$7.5 billion of Argentine debt without any kind of intervention from the International Monetary Fund. A large percentage of this debt is held by OECD member export credit agencies. The Paris Club was born in 1956 when a group of creditor countries met in Paris to renegotiate Argentine debt owed to export credit guarantee institutions.
Human rights and ECAs: the Uruguayan paper mills case (PDF)
(CEDHA, Argentina, 23 Jan. 2006) Nearly 40 000 Argentine citizens have petitioned the Inter American Commission on Human Rights, alleging that the Uruguayan government has allowed serious breaches of human rights caused by two pulp mills. The largest of the mills is sponsored by three Finnish pulp and paper companies, Botnia, Metsaliitto and UPM, and is backed by Finnvera, the official, state owned export credit agency of Finland. The mills, located on the international waterway between Uruguay and Argentina, breach IFC operational policy, OECD Guidelines and violate international law, recently triggering Argentina to bring a case before International Court of Justice at the Hague.
